Amazon cuts services publishers

There's a story breaking right now about Amazon asking oublishers to pay more for services they already receive (Publisher's Weekly has a good article). Some are calling it extortion, and normally I would be leading the charge. But I don't think it is.

If you look at this PDF, you'll see that most of the services are exactly that: services. It costs Amazon money to provide them, and I don't see why Amazon shouldn't charge for them. Some complain because they have to pay more for what they already receive, and it is unfortunate that Amazon fell into this mistake:

When people get something for free, they expect to always get it for free. Eventually they will demand it as a right. -unknown

There's also a second point here that I don't think anyone has made, and it's about the lifecycle of a business. There's a rule that at some point a business stop looking for new customers, and start trying to make the best profit off their existing customers. It looks to me like Amazon thinks they have gotten as big as they can as a book retailer, and now it's time to make a better profit.

There's a third point here, too. Charging for these services appears to go against Amazon's business practice of "make it up in volume" (in principle, at least). That might be a sign that Amazon thinks of themselves as a mature company; they're abandoning the practice that gave them their competitive edge.

About Nate Hoffelder (11591 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

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